What Are Underwriting Rules?

Insurance companies use underwriting rules to decide
whether or not to sell car insurance to you. Insurance
companies also use underwriting rules to decide whether
or not to renew your existing car insurance policy, or to
change your physical damage coverage, such as Collision
or Comprehensive coverage.

All underwriting rules used by insurance companies must
be filed with FSCO. Once FSCO has reviewed and approved
these rules, insurance companies may not use other rules
to deny you coverage.

If an insurance company refuses to sell you an insurance
policy, or to renew your policy, the company must advise
you in writing which rule (or rules) it has used to deny
coverage to you.

While underwriting rules differ from company to company,
these are some of the more common rules:
• whether you or drivers in your household have had
more than a certain number of at-fault accidents or
driving convictions;
• whether you’ve had a car insurance policy cancelled
a number of times because you failed to pay your
premium; or
• whether you’ve failed in the past to provide correct
or complete information when applying for car
insurance.

When shopping for car insurance, or when trying to renew
your car insurance policy, keep in mind that an insurance
company’s underwriting rules will affect whether or not you
can obtain insurance – or continue to be insured – with
that insurance company. Check with your broker, agent or
insurance company to find out what your company’s
underwriting rules are and how they may affect you.
Underwriting rules which do not comply with the Insurance
Act or the regulations, such as those which are contrary
to public policy, are prohibited. FSCO has determined that
rules which are contrary to public policy deny insurance
to individuals based on such factors as:
• religion, race, nationality or ethnic group;
• age, sex and marital status;
• location of the car; or
• whether they are newly licensed or a driver new
to Canada.
Note: Factors such as: age; sex; marital status; where
you live or the location of the car; and whether you
are newly licensed or a driver new to Canada; ARE
permitted as rating criteria (i.e., what the policyholder
will pay for coverage).